Mouse and human epidermal cell cultures and epidermal cell lines are utilized as models for studying mechanisms of epithelial carcinogenesis in vitro. Low extracellular Ca++ concentrations in culture medium select for basal cells, while elevated Ca++ induces terminal differentiaion apparently by modulating the flux of other cations. Carcinogen exposure in vitro or to mouse skin prior to culture results in the development of cell colonies which re clonal in origin and are resistant to Ca++ induced terminal differentiation. The basis for altered differentiation in skin carcinogenesis is being explored through gene cloning, and cDNA probes for the 62K and 69K keratins have been prepared. Studies to define the role of tumor promoters in skin carcinogenesis have revealed that phorbol esters act specifically on basal cells and induce a specific program of new protein synthesis. Phorbol esters affect subpopulations of basal cells in a heterogeneous way, inducing differentiation in one class and stimulaing proliferation in another.